Industrial output posts sharpest growth in 6 years in June on cars, chips
People shop at a supermarket in Seoul, Wednesday. Yonhap
Korea's industrial output rebounded in June from a month earlier, snapping two months of decline led by the automobile and semiconductor industries, data showed Friday, with retail sales and facility investment also gaining ground.
Industrial production added 2.3 percent last month from May, according to data from the Ministry of Data and Statistics. It marked the sharpest growth since a 2.9 percent rise posted in June 2020.
It was also the first time since March for the three economic indicators to rise simultaneously.
Output in the mining and manufacturing sector, a key pillar of the economy, shot up 6.4 percent on the back of the automobile and chip industries.
In detail, output from the automobile and semiconductor sectors rose 15.4 percent and 4.5 percent, respectively. The output in the crucial chip industry had shed 10 percent on-month in May.
The ministry attributed the strong gains in the two sectors to hybrid cars and memory chips, respectively.
"Supply disruptions of auto parts caused by a fire at an engine component company in March have been ironed out. Rising demand at home and abroad also led to a significant increase in automobile production," said Lee Doo-won, a senior ministry official.
The report, however, showed output from the electronic components sector fell 10.4 percent.
Output in the service sector rose 0.7 percent over the period, driven by the finance and insurance sector, although output in the information and communication segment fell 3 percent.
Retail sales, a gauge of private spending, rose 2.7 percent over the period, led by durable goods, such as cars.
The report showed sales of semidurable goods, such as clothes, fell 1.7 percent, while those of durable goods, such as cars and computers, rose 12.6 percent. Sales of non-durable goods, including food, increased 0.2 percent.
The growth in sales of durable goods was the highest in nearly 17 years since the 14 percent spike posted in September 2009. The ministry said sales of cars jumped 21.8 percent, marking the steepest rise in six years and three months.
Promotional events launched by Samsung Electronics and LG Electronics Inc. also contributed to the overall increase, it added.
Facility investment also shot up 5.8 percent in June from a month earlier, the data showed.
The latest official findings showed investment in machinery and transportation equipment, including cars, rose 6.9 percent and 3.4 percent, respectively.
"As exports continue to grow and domestic consumption has shown signs of recovery, major industrial activity indicators improved significantly in June," the Ministry of Finance and Economy said in a separate report.
The finance ministry said it was notable that industrial output increased 0.9 percent in the April-June period from a quarter earlier, maintaining momentum despite the war in the Middle East.
"As exports remained strong in July, while consumer and business sentiment also continued to recover, such factors are expected to have a positive impact on the economy going forward," it added.
The government will continue efforts to address uncertainties stemming from lingering geopolitical tensions in the Middle East, with a focus on energy and supply chains, it added.